Madras High Court
Q.474 vs The Assistant Pf Commissioner (C&R) on 6 September, 2011
Author: Vinod K.Sharma
Bench: Vinod K.Sharma
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 06/09/2011 CORAM THE HONOURABLE MR.JUSTICE VINOD K.SHARMA W.P.(MD)No.7787 of 2009 and M.P.(MD)No.1 of 2009 Q.474, Thayilatti Primary Agricultural Cooperative Bank, rep by its Special Officer, S.Rajendra Prasad ... Petitioner Vs. 1.The Assistant PF Commissioner (C&R) Employees Provident Fund Organization, Regional Office, Madurai-600 002. 2.The Appellate Tribunal for Provident Funds Organization, EPF Appellate Tribunal, 2nd Floor, Bhavishya Nidhi Bhawan, 14, Bhikaji Cama Place New Delhi-110 066. ... Respondents PRAYER Writ Petition is filed under Article 226 of the Constitution of India, to issue a writ of certiorari, to call for the records relating to order passed by the 1st respondent in No.TN/MDU/SDC/TN/41037/SRO/2003/L.O.No.159, dated 6.6.2003 and the consequent order of the Appellate Tribunal, New Delhi No.A.T.A.No.441(13)2003, dated 18.06.2009 and quash the same. !For Petitioner ... Mr.V.O.S.Kalaiselvam ^For Respondent ... Mr.V.S.V.Venkateswaran :ORDER
The petitioner has approached this court with a prayer, for issuance of a writ, in the nature of certiorari, to quash the order passed by the Regional Provident Fund Commissioner, Madurai, in exercise of power under section 14-B of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 [hereinafter referred to as 'Act'].
2.The petitioner, M/s.Thayilpatti Primary Agricultural Cooperative Bank, is an establishment/factory, covered under the Act. It has been allotted code No.TN/MD/41037. According to the provisions of the Act, the contribution payable under the Act and the Scheme framed therein, are required to be deposited within 15 days of the close of every month. The premises of the petitioner was inspected, on 26th June 2000, wherein, it was noticed, that the petitioner had not deposited the contribution for the period 9-97 to 2/2000 within time.
3.The petitioner was issued notice under section 14-B of the Act, for imposing penalty. The petitioner appeared and opposed, an imposition of damages, on the ground that the petitioner was not aware of the coverage of the petitioner and that, it was suffering heavy losses.
4.The pleas raised by the petitioner were found to be baseless, for the reason that the coverage of the petitioner, was voluntary coverage, in the year 1997, it was further held that as the Act and Scheme, framed thereunder, are the beneficial piece of legislature, therefore, loss suffered by an employer cannot be a ground not to deposit the contribution.
5.The learned Regional Provident Fund Commissioner, proceeded to impose damages, on the basis of percentage fixed under the scheme.
6.The petitioner, being aggrieved by the order, filed an appeal before the learned Employees' Provident Fund Appellate Tribunal, New Delhi. The learned Appellate Tribunal, recorded a positive finding, that Officer conducting enquiry, under section 14-B of the Act, had not followed, the law laid down by the Apex Court, and the High court in its correct perspective.
7.It was also held that no enquiry or finding of fact, that the appellant had willfully and deliberately withheld the Provident Fund contribution, was recorded to impose damages.
8.Further more, the Assessing Officer had also failed to exercise discretion vested in him, to calculate the damages, taking in view the facts and circumstances of the case.
9.A positive finding was recorded that the order passed by the learned Regional Provident Fund Commissioner, Madurai, was not sustainable in law.
10.The learned appellate tribunal, thereafter, instead of remitting the case back to the competent authority, to re-determine the damages, proceeded to impose the damages upto 15% per annum on the arrears of the contribution, by placing reliance on the judgment of the Hon'ble High Court of Orissa, in the case of Bhubaneswar City Distribution Division vs. UOI & Another (1998 II LLJ 1044].
11.The learned counsel for the petitioner, challenged the impugned order, by contending therein that though the petitioner had applied for coverage, in the year 1997, but the Act was extended to the establishment of the petitioner, only on 10th March 1999, when the notification was issued under the Act, therefore, there was no occasion to impose damages prior to the enforcement of the Act, specially, when the petitioner was not aware of the coverage, though, opted for being covered.
12.The learned counsel for the petitioner also vehemently contends, that while imposing damages under section 14-B of the Act, the respondent No.2 was bound to pass a quasi-judicial order, and in absence of recording a finding, that the delay in deposit was deliberate and intentional, no damages could be imposed and in-fact should have been waived.
13.There is a force in the contention of the learned counsel for the petitioner.
14.As a matter of fact, the learned appellate tribunal itself, has recorded a positive finding that the impugned order was not in consonance with the provisions of the Act, as the Authorized Officer had failed to consider the settled principles of law, to form an opinion with regard to the delay, as also whether the delay was intentional and malafide.
15.The learned appellate tribunal rightly held that the Authorized Officer had failed to exercise its discretion vested in him, by applying mind to the facts and circumstances of this case.
16.The learned appellate tribunal, in view of positive findings referred to above, was not justified, in imposing the damages at 15%, without considering the circumstances, leading to the non deposit, and delay. It also failed to take note of the fact that the Act was made applicable to petitioner, on 10th March 1999. It was also to be considered whether the voluntary coverage could attract the damages, in absence of any positive evidence showing, the intimation of coverage, and issuance of code number to the petitioner.
17.For the reasons stated herein above, the writ petition is allowed, the impugned orders are set aside and the case is remitted back to the learned Regional Provident Fund Commissioner, Madurai, to reconsider, the matter, by taking into account, the effect of enforcement of the Act, on 10th March 1999, and also to record a finding with regard to the delay, as to whether, it was bona-fide or deliberate and thereafter, exercise the jurisdiction under section 14-B of the Act, to impose the quantum of damages, if any.
18.Consequently, connected Miscellaneous Petition is closed. No costs.
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